2 ms·

> It doesn't. It just increases their profit. this isn't a self-evident claim. if you have other large competitors who operate in the same market space (for wa

> It doesn't. It just increases their profit. this isn't a self-evident claim. if you have other large competitors who operate in the same market space (for walmart and target, large stores selling a mix of well-known brands and discount store brands), and there is a cost-cutting technique that's available to all participants, it's really hard to employ it and keep all the surplus for yourself. this is especially true if the customers don't like it. I realize this is a naive econ 101 argument, but this particular market is about as close to "perfect competition" as it gets. I personally couldn't tell the difference between target and walmart if you removed all the signs, but if one were noticeably cheaper or more convenient, I would go to that one every time. cost comparisons between walmart and aldi is not particularly convincing; they sell different assortments of products. by not selling such a wide assortment of well-known brands, aldi probably has a significantly more efficient supply chain. > Meanwhile, a lot of companies are getting rid of their self-checkouts since there's tons of theft. They've probably lost more at some places than they saved on laid-off cashiers. well this is certainly a confounding factor to my argument. if true, there aren't really any savings to pass on in the first place. maybe it's just a lose-lose for everyone involved.

nickpsecurity 7y ago
Your argument makes the common mistake to look at these companies as abstract entities competing based on economic theory instead of groups of humans doing what humans do in businesses. In most cases, the decisions come from middle management that operate based on a mix of competition and what gets them a bonus. Cutting costs or increasing profit within a manager's personal area of responsibility is often a bonus (or promotion) metric. So, many of them keep damaging their own companies to try to get their bonus or promotion. Such companies usually have endless discussions, meetings, and politicking where they explain away their bullshit hoping it will work. This should be a factor in every discussion of why companies are doing what they're doing. Will the CEO or any managers doing it get an easier bonus or transition for it with minimal liability within whatever period they're working? Well, there you go. That's economic self-interest in the real world.

nickpsecurity 7y ago

Your argument makes the common mistake to look at these companies as abstract entities competing based on economic theory instead of groups of humans doing what humans do in businesses. In most cases, the decisions come from middle management that operate based on a mix of competition and what gets them a bonus. Cutting costs or increasing profit within a manager's personal area of responsibility is often a bonus (or promotion) metric. So, many of them keep damaging their own companies to try to get their bonus or promotion. Such companies usually have endless discussions, meetings, and politicking where they explain away their bullshit hoping it will work. This should be a factor in every discussion of why companies are doing what they're doing. Will the CEO or any managers doing it get an easier bonus or transition for it with minimal liability within whatever period they're working? Well, there you go. That's economic self-interest in the real world.